Rs 8 trillion wiped out as markets shed 1.5%; Zee shares slump 30%

Selloff led by banks, oil and gas stocks, FMCG, and metals

Indian equities closed in the red for a fifth time in six sessions on Tuesday amid continued selloff in banking stocks. A 30 per cent slump in shares of Zee Entertainment Enterprises and growing concerns over hostilities in the Red Sea also weighed on sentiment.

The key benchmark indices, which recorded gains in early sessions, plunged over 2 per cent from the day’s high.

Compared to Saturday’s closing, the S&P BSE Sensex closed 1.5 per cent, or 1,053 points lower, at 70,371. The National Stock Exchange Nifty 50 also cracked 1.5 per cent to end at 21,239.

The broader market witnessed a deeper selloff, with the Nifty Midcap 100 and Nifty Smallcap 100 plunging 3.1 per cent and 2.9 per cent, respectively. About Rs 8.4 trillion of investor wealth got shaved off.

The decline was led by the banking sector stocks, with top-weight HDFC Bank plunging 3.25 per cent, extending its slide to 15 per cent since its disappointing results last week. HDFC Bank alone accounted for a third of index losses.
 

The Nifty Bank Index declined 2.3 per cent on Tuesday. All sectoral indices, except for pharma, closed in the red, with Nifty Media nosediving almost 13 per cent, led by a 31 per cent fall in ZEEL. Shares of Reliance Industries fell over 2 per cent and were the second biggest drag on market performance. Foreign portfolio investors (FPIs), who have been on a selling spree last week, have offloaded stocks worth over Rs 18,300 crore this month.

On Tuesday, they pulled out Rs 3,115 crore, while buying from domestic institutions too was muted at Rs 214 crore, according to data from the National Securities Depository and exchanges.

“Selling by FPIs due to reasons like high valuation and mixed results for the earnings season so far, along with recent escalations in tensions in West Asia and the Red Sea, prompted investors to book a profit from the recent rally,” said Vinod Nair, head of research at Geojit Financial Services.

Fitch Group on Monday said that the rising hostilities in the Red Sea due to Houthi attacks pose a comparatively higher risk to South Asian economies.

Analysts said some shine could be taken off India in terms of flows with China reportedly taking more measures to revive its stock market, which includes buying stocks worth 2 trillion yuan through Chinese state-owned companies. The Hong Kong market jumped nearly 3 per cent on the report of China’s stimulus.

Experts see the market consolidating in the coming weeks until the emergence of new positive triggers.

“Given weak global cues and a mixed set of earnings released so far, the market is likely to consolidate and may drop a little further until the next set of fresh positive triggers,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.

In the Nifty50 pack, Cipla was the top gainer with a 7 per cent rise after beating Street’s profit estimates.

Sun Pharmaceutical Industries, Bharti Airtel, and ICICI Bank were the other major gainers with a 3-4 per cent upside. IndusInd Bank registered the biggest decline at 6.1 per cent, followed by Coal India (down 5.9 per cent) and Oil and Natural Gas Corporation (down 5 per cent).

Overall, 3,049 stocks declined while only 886 advanced on the BSE.